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GILTS: Light Bid On Dovish Fedspeak, 2-Year Yields Through Yesterday's Low

GILTS
CEEMEABulletUKMarketsFixed Income Bullets

Dovish Fedspeak has provided a bid for core global FI markets, although gilts stick to a narrow range.

  • Weakness in crude oil futures is also supportive for bonds.
  • Futures last little changed on the day at 91.04.
  • Initial resistance at yesterday’s high untouched, bearish technical trend intact.
  • Yields 2-6bp lower, curve holds steeper on the day.
  • 2-Year yields through yesterday’s lows, testing 4.40%. Early Dec low at 4.341%.
  • BoE-dated OIS now prices just under 60bp of cuts through year-end, that compares to ~36bp over the same horizon late Tuesday.
  • SONIA futures flat to +6.5. Morning highs intact across the strip.
  • A Friday appearance from BoE Governor Bailey has been scheduled (text release at 17:00 London, speech at 21:00). The appearance is unlikely to be market moving given the topic of ‘A Central Banker’s view of global challenges and expectations for the Bretton Wood Institutions’ response.’
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Dovish Fedspeak has provided a bid for core global FI markets, although gilts stick to a narrow range.

  • Weakness in crude oil futures is also supportive for bonds.
  • Futures last little changed on the day at 91.04.
  • Initial resistance at yesterday’s high untouched, bearish technical trend intact.
  • Yields 2-6bp lower, curve holds steeper on the day.
  • 2-Year yields through yesterday’s lows, testing 4.40%. Early Dec low at 4.341%.
  • BoE-dated OIS now prices just under 60bp of cuts through year-end, that compares to ~36bp over the same horizon late Tuesday.
  • SONIA futures flat to +6.5. Morning highs intact across the strip.
  • A Friday appearance from BoE Governor Bailey has been scheduled (text release at 17:00 London, speech at 21:00). The appearance is unlikely to be market moving given the topic of ‘A Central Banker’s view of global challenges and expectations for the Bretton Wood Institutions’ response.’